One-time showcase for Dell closing in Austin

In the late 1990s, I was given a tour of Dell’s Topfer plant in Austin, a sprawling monument to the changes the Round Rock -based company had brought upon the personal computer business.

It was a showcase for Dell’s direct model — every desktop computer being assembled in the 200,000-square foot facility was built to order, and at the time, a lot of systems were rolling through the company’s super-efficient processes.

But that was then and this is now. Dell’s no longer at the top of its game, and what was once a monument to its achievement has become a drag on its bottom line. Dell announced Monday it’s closing the Topfer facility and will lay off between 800 and 900 Austin workers.

The company said the plant closing is part of a $3 billion program to cut its product costs worldwide over the next three years.

That move will affect engineering design, manufacturing, logistics and materials across the company’s global product operations.

The factory that will be closed is the massive Topfer Manufacturing Center on Howard Lane, which has been a leading Dell factory since the late 1990s.

The plant closing is the biggest job hit at Dell in Central Texas since the company cut more than 5,700 jobs during the tech downturn in 2001.

The company also said it is considering “strategic alternatives” for some parts of its Dell Financial Services arm. A sale also could affect those jobs in Austin.

“We believe we have a $3 billion opportunity to drive both productivity and efficiency,” CEO Michael Dell said.

The plant is named for Mort Topfer, who was recruited from Motorola in the mid-1990s to eventually become Dell’s vice-chairman and help bring the company out of an earlier slump. There’s a certain irony in closing a plant bearing his name.

Dell hasn’t said where its desktop manufacturing will be concentrated, but Roger Kay thinks its new North Carolina plant might be the spot:

Concentrating desktop assembly in North Carolina could make sense, Kay said, because Dell’s plant there is close to its East Coast customers. The company also got hefty incentives from the state to build the plant.

“They carved a real sweet deal in North Carolina, and they need to use a lot of the plant capacity there,” Kay said.

5 Responses

It was once cheaper to build in Austin. Now the city’s bigger, with bigger city problems, which means bigger city costs.

Dell had a chance to make PCs easier and friendlier for the masses, and we get the same junky machines, ugly cases, low performance and pricing games. After seeing one too many “substitutions,” I’m also very wary of ordering from them.